The Viscount of Oxfuirdasked Her Majesty's Government:
Whether, following the recent Microcredit Summit in Washington, they will explain their policy towards microfinance as a means of poverty reduction.
§ The Minister of State, Foreign and Commonwealth Office (Baroness Chalker of Wallasey)Microfinance—i.e. savings as well as credit—can be a powerful tool able to benefit large numbers of poor people in a manner which is financially sustainable. Since 1990, we have provided increasing support for projects and institutions engaged in microfinance, notably through our bilateral programmes in Africa and Asia. Total commitments to date are approximately $100 million and it is a field where we anticipate continuing to deploy significant resources. But experience shows that it is important to assist microfinance institutions (MFI) over time to achieve full financial self-sustainability.
In addition to direct support for microfinance institutions, the Overseas Development Administration is involved in many other related areas. For example, we are active members of the World Bank-based Consultative Group to Assist the Poorest (CGAP); ODA chairs the working group on management information systems and reporting standards for microfinance institutions. ODA is also the major source of funds for a study by the MicroFinance Network, an association of leading MFIs, on the critical subject of the regulation and supervision of MFI, looking at recent experiences in Latin America, Asia and Africa.
We are concerned to assess the impact of microfinance. The results of a major research project on Finance Against Poverty was published last year. Currently ODA is supporting a study, in collaboration with ten leading UK NGOs, on the degree to which women are empowered through microfinance.